Ride-hailing giant Uber's full-year net loss widened to $4.5 billion in 2017 as the company endured a tumultuous year that included multiple scandals, a lawsuit alleging the theft of trade secrets and the replacement of its chief executive.
The results also showed that Uber cut its fourth-quarter net loss by 25% compared with the third quarter as new CEO Dara Khosrowshahi moves to make the company profitable in advance of an initial public stock offering planned for sometime next year.
The full-year loss grew from $2.8 billion in 2016, a year with results skewed by a gain from the sale of Uber's unprofitable business in China. Uber also said its U.S. ride-hailing market share fell from 82% at the start of last year to 70% in the fourth quarter. Uber said the share has now stabilized.
Gross revenue for the year was $37 billion, a jump of 85% compared with 2016.
For the fourth quarter, Uber's net loss was $1.1 billion, down from $1.46 billion it lost in the third quarter. Bookings from fares rose 14% to just over $11 billion for the quarter.
Although the losses are significant, the results still are positive for Uber with revenue rising and losses falling in three of four quarters in 2017, said Rohit Kulkarni, managing director of SharesPost, a research group focused on privately held companies. The numbers show that Uber under Khosrowshahi is on a path toward profitability and a sustainable economic model, Kulkarni said. "If you draw that out further, a year from now, this could be a significant IPO waiting to happen," he said.
Uber considers adjusted earnings before taxes as a better indicator of its financial performance rather than net earnings based on generally accepted accounting principles, which include losses for accounting purposes. On an adjusted basis — excluding stock-based compensation, legal costs, taxes and depreciation — the company lost $2.2 billion for the full year. The fourth-quarter adjusted loss was $475 million, down from $606 million in the third quarter.
San Francisco-based Uber Technologies Inc.'s results are difficult to report because only pieces are released. Khosrowshahi detailed them on a conference call with investors Tuesday, and the company made some results public by giving them to a website called the Information.
A person briefed on the results provided some numbers and confirmed the accuracy of the Information's story to the Associated Press on Wednesday. The person didn't want to be identified because Uber remains a private company.
Last year was a particularly bad one for Uber, with its reputation tarnished by the company's acknowledgment of rampant sexual harassment within its ranks, a yearlong cover-up of a major computer break-in, and the use of duplicitous software to thwart government regulators.
CEO Travis Kalanick was ousted in June and replaced by Khosrowshahi in August.